Disliked{quote} I am not a programmer, But I was speaking to a top one (if not THE top) Programmer for one of the big 5 banks in Canada about 3 months ago and he said something interesting. He said contrary to what people think human traders are by far the best traders.Ignored
Imho, your friend the programmer you were talking to is both right and wrong, and he is more wrong than right. Humans do have the potential to be by far better traders than EAs, but let me add a big caveat emptor here, humans also have the potential to be by far the worse traders. Unfortunately, psychology studies about decision making show us abundant evidence that humans are more often than not 'irrational' decision makers (the classic ‘Judgment under uncertainty’ by Tversky & Kahneman is an excellent read on this), and consequently most humans are very likely to perform poorly at trading. That said, paradoxically, EAs might be the ‘rigid’ decision makers, but this unintelligent rigidity assures a measure of consistency that the vast majority of humans with all their intelligent flexibility simply cannot. Consequently, a well coded EA rigidly performing a strategy with edge will trade better than 99% of humans. And yes, such profitable EAs do exist although very few in number, and despite the bigger market participants best efforts to make them edgeless.